Evidence of meeting #4 for Finance in the 39th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was information.
General Counsel, Legal Services, Financial Transactions and Reports Analysis Centre of Canada
A document from the federal finance department proposes that such entities should be registered, so that we can at least know who is in charge.
Conservative
Luc Harvey Conservative Louis-Hébert, QC
Theoretically, there should not be any more double endorsements.
General Counsel, Legal Services, Financial Transactions and Reports Analysis Centre of Canada
Yes.
Conservative
Luc Harvey Conservative Louis-Hébert, QC
All right. What other tools would you need to do your work? I did not ask you to give a yes or no answer.
General Counsel, Legal Services, Financial Transactions and Reports Analysis Centre of Canada
This is a question that should be put to my client.
Senior Deputy Director, Financial Transactions and Reports Analysis Centre of Canada
As I mentioned in my presentation, there are a few changes. We've learned a lot over the last three years. We'd like to see the registration of the money services business. We'd like to be able to include more information in our disclosures to law enforcement and security agencies. We'd like to look at an appropriate mechanism to introduce administrative monetary penalties for the compliance side of the act.
Conservative
Luc Harvey Conservative Louis-Hébert, QC
Once again, I must say that my time is short. This is why I wonder if you could prepare for us a single-page document, containing a list of tools or mechanisms that you would like to have us study, so that we can contribute to the advancement of your file and ensure a better protection against money laundering for Canada.
How much time do I have left, Mr. Chairman?
Conservative
The Chair Conservative Brian Pallister
As Mr. Harvey has accurately predicted, he has run out of time. However, I would invite him to review the minutes and the response to his previous question as a starting point for dealing with the request that you outlined.
I'll go to Madame Brunelle.
Ms. Brunelle, you have five minutes.
Bloc
Paule Brunelle Bloc Trois-Rivières, QC
Your mandate is to determine to what extent the proceeds of crime are used to finance terrorist activities.
Does your experience tell you that for the past few years, terrorist activities are on the increase and that this increase can justify the Americans requiring all Canadians to have passports? Are these things closely linked?
General Counsel, Legal Services, Financial Transactions and Reports Analysis Centre of Canada
I am sorry, but with regard to the passport issue, I am not really able to give you an answer.
General Counsel, Legal Services, Financial Transactions and Reports Analysis Centre of Canada
We have noticed incoming information about terrorist activities. Given that this agency has only been in existence for three years, we cannot tell whether there is any real increase in terrorist activity, or if it is simply because we are identifying operations which, in our opinion, are involved in financing terrorist activities.
However, as the director of Criminal Intelligence Service Canada recently said, there is no doubt that there are entities and persons involved in activities which, under our legislation, are considered as terrorist activities or as a threat to our country.
Bloc
Paule Brunelle Bloc Trois-Rivières, QC
At times, as we look back, we wonder whether there is not a certain amount of collective paranoia. Canada is gaining a reputation as a rallying point for terrorists or as a place through which they all pass.
General Counsel, Legal Services, Financial Transactions and Reports Analysis Centre of Canada
The only thing I can say is that we have a first-class banking system. For this reason, and also because its economy is closely linked to that of the United States, Canada could be used by terrorists to finance their activities.
As for the reasonable nature of our suspicion regarding this or that piece of information, we are constantly on the alert. I hope, however, that we are not being paranoid.
Bloc
Paule Brunelle Bloc Trois-Rivières, QC
I see that your mandate also includes prevention and deterrence. How do you execute these mandates?
Senior Deputy Director, Financial Transactions and Reports Analysis Centre of Canada
I'll start, and we'll let Paul finish up if he has additional comments.
The prevention and deterrence functions are mutually reinforcing. So if we can detect and help law enforcement to increase their investigations and prosecutions; if we can put in place, with our reporting entities, the means by which you can't walk around with hockey bags full of criminal proceeds and deposit them without reporting; if we can put in place mechanisms whereby those on the front line, and they know best, have a place to report transactions about which they're suspicious, about which there's something not quite right--and we can look across the financial services sectors, it's not just one bank or one money services business, it's combinations of banks, money services businesses, casinos--if we can put together mechanisms such as those, we deter.
We also use public awareness. We reach lots of reporting entities. The public goes to those reporting entities to do their banking. It's become much more apparent, I think, over the last four years that there are rules and regulations and there's the ability for Canadian law enforcement to follow the trail when it is criminal proceeds.
Conservative
Conservative
Rick Dykstra Conservative St. Catharines, ON
I have a couple of questions. If I could take a step back here, in terms of your dealings with the banking institutions, credit unions, and caisses populaires, how would you deem, or term, or explain your working relationships with them?
Senior Deputy Director, Financial Transactions and Reports Analysis Centre of Canada
For the most part--I'd like to say for the whole part--they are very positive. We like to take a cooperative approach when it comes to compliance, and I'll give you an example.
When FINTRAC was introducing the first of the reporting requirements, which would have been four or five years ago, we phased them in. So we discussed with the reporting entities because it is a big challenge. We wanted to collect all the information electronically, which is more efficient for us and more efficient for them. We took an approach where we could phase them in when the regulations came into force for each of the different reporting types. We sat down and asked them, would six months be sufficient time if we want to make any systems changes that affect electronic reporting? And we put in place mechanisms with the Canadian Bankers Association, what we called a change management process. We meet regularly with the larger reporting entities, and I would say that the relationships are, on the whole, positive.
It's tougher to reach the unregulated sectors, but I would still characterize those relationships as somewhat positive. They're maybe not as positive as with the regulated sectors, but we find they are responding, for the most part.
Conservative
Rick Dykstra Conservative St. Catharines, ON
I don't know whether you have the number handy, but in the dealings with them in terms of actually arriving at prosecutions, (a) have you been able to achieve prosecutions, and (b) do you have a number as to what that would be?
Senior Deputy Director, Financial Transactions and Reports Analysis Centre of Canada
I'm not trying to be evasive. My lawyer is sitting here. By law, we cannot reveal the fact that we've made any specific disclosures. Our legislation prohibits us from doing that. We take the protection of the privacy of the information extremely seriously, and there are penalties for those who work in FINTRAC who would disclose such information.
But I can tell you that there are instances in which FINTRAC has made disclosures and we know charges have been laid. And I can tell you that we're also aware of a number of instances where the centre has made disclosures and individuals have been convicted. I cannot talk about those cases.
Conservative
Rick Dykstra Conservative St. Catharines, ON
No, it was more about a number than it was.... I know it's been a tough hour, because you're not in a position to be able to give specifics on cases, but I was looking for a general sense. A lot of taxpayers' money is involved in running the department, and we're going to invest more money over the next two years, so the sense that there has been success and that it has come to fruition is what would be good to hear today.
General Counsel, Legal Services, Financial Transactions and Reports Analysis Centre of Canada
Ms. Wing referred to dozens of cases, but I might just add that money laundering cases are very lengthy and time-consuming. We've been in business only a few short years; investigations can often take three, five, eight, or ten years before charges are laid. So we're just at the beginning of the cycle of seeing our disclosures come to fruition in terms of charges and, ultimately, convictions.
Conservative
Rick Dykstra Conservative St. Catharines, ON
In response to that, my final question would be about how you are working with the banks. I'm speaking specifically to the banks, but I'm wondering how you can improve, how you can work, what is going to foster a stronger relationship, in your opinion, so that you will be able to pursue more of those opportunities.